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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4879
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I own a number of properties (under my personal name) which

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Hi, i own a number of properties (under my personal name) which i let out as HMO's and i also manage 2 other HMO's on behalf of clients. My question is can i set up a limited company to receive the rents and manage cost's even though the properties are in my personal name. I do all the maintenance, gardening, plumbing etc. which i believe counts as a business?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..The concept is right but you should be mindful of your charges to the operation for maintenance etc.In order for them to be considered business expense, you would have to raise an invoice for work done and this would be chargeable income for you personally that you would have to declare on your tax return.In my professional opinion there would be no tax benefit to you.The formation and running of a LTD company would be an unnecessary cost. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
So even though the my properties which have mortgages in my personal name, can off load the rental profits in the corporation?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your response..You have two situations...- manage your own properties- manage properties owned by others. In order for the company to show rental income and associated costs relating to properties owned by you, you would have to transfer these properties to the company (both asset and liabilities).You could have the company acting as property management agents whereby the company is collecting the rent, making payments to landlord and others and charging management fee to landlord.Where you are managing properties on behalf of clients, these could be managed by the LTD company.If your profits from property income don't put you into higher rate tax band, then you should run your operation as sole person and not consider LTD company.I hope this is helpful.
Customer: replied 1 year ago.
so just to confirm I could set up a company to act as a management agent to receive the rent on my properties and subsequently pay me the landlord rent minus a fee?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Thats correct...you could set up a management company for this purpose.Pay tax on the profits of LTD companny and then make a dividend payment. If dividends are up to £5,000 in total, there is no personal tax liability as from next year there is a Dividend allowance of £5,000 like personal allowance. I hope this is helpful.If you are happy and there are no more issues I will appreciate if you would kindly rate my service/accept the service I have provided to ensure I get credited for it by Just Answer.
Customer: replied 1 year ago.
one last point, is your answer insured ?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.I am not clear what you mean by is your answer insured...I have given you professional advice as a qualified accountant in practice.To the best of my knowledge answers on this site are not insured.I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4879
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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